fin lit housing and insurance exam

This is an amount you must pay out of pocket before the insurance pays anything toward a claim:

deductible

if you purchase a new car for $20,000 and sell it in two years for $10,000, what is the difference between the price you paid and price you told it for called?

depreciation

When purchasing a house, what is the amount of money you need upfront to qualify for a bank loan called?

down payment

A good example of a closed-end credit is:

mortgage loan

When paying back a debt, you should always try to do what?

pay off as much as you can reasonably afford

The amount and insured pays each month

premium

Which of the following is the best type of home loan to take out when interest rates are low?

Fixed

There is no need to have long term disability insurace

False

When purchasing a house, the money put down with the initial offer is called a deposit

False

short term disability insurance is more important than long term disability insurance

False

Homeowners insurance covers only the home on the property and no other buildings.

False

Paying rent on a home builds equity for the renter

False

Renter insurance will replace all of the renters peronsal affects, as well as the structure (apartment or house)

False

Renters insurance covers all accidents that may happen at a place being rented, no matter where they happen on the property.

False

What are the two components of a loan that a borrower pays?

Principle and interest

When choosing a college/school or training program to attend, which of the following is most important consideration?

The quality of the education you will receive for the money you are spending

Life insurance policies never have a deductible.

True

Most health insurance plans typically have a deductible, co-pay and maximum out of pocket.

True

Real Estate returns come in the form of rents and capital gains

True

perhaps the greatest disadvantage of using credit is the temptation to overspend

True

The borrower's financial ability to meet credit obligations is called:

capacity

The amount you must pay above your deductible until you reach your maximum out of pocket:

co-insurance

this is a fee for service charged by clinics and emergency rooms before you receive any treatment or service

co-pay

this pays to repair you car in the event of an accident

collision

By paying cash for a purchase, you:

forgo the opportunity to keep the cash in an interest-bearing account

a debit card:

immediately deducts the cost of your purchase from your bank account

the insured person is referred is referred to in an insurance contract as this

insured

The insurance company is know as this:

insurer

When looking at renting an apartment, or buying a house, which of the following is the most important financial aspect of your decision?

is the cost of the place within my budget (less than 30% of gross income)

this covers you in the event you are a victim of a car accident involving a person who does not have enough insurance

under insured

this covers you when you are a victim of a car accident involving a person who has no insurance

uninsured

How long does short term insurance last?

up to six months

If you cosign a loan

you will be required to pay the loan in full if the borrower defaults on the payments